The Impact of World Bank Policy and Programmes on the Built Environment in Egypt

Press Release

20 March 2013

Despite billions of Egyptian pounds in infrastructure investment both from national and international sources, Egypt's cities, towns and villages continue to grow and function in much the same way they have over the last three decades, namely through self-reliance. There are varying degrees of deprivation such as shortages in housing, municipal services and transport--the three main ingredients of functioning communities-- while on the other hand, a minority is very well served. It is no surprise then that the main call of the January 25thRevolution was “Bread! Freedom! Social justice!”


One significant partner  the Government of Egypt has had in the development of Egypt's built environment has been the World Bank, which has invested heavily in infrastructure projects such as electricity, waste water and natural gas, as well as in transportation and affordable housing. These investments come along with the Bank’s policy recommendations and technical assistance which have included championing private sector involvement and phasing out government subsidies, while taking the stance that government should be an “enabler” rather than a “provider” of such services.


The Bank’s current portfolio (July 2012) of built environment-related projects is $3,180 million, roughly 81 percent of the total $3,945 million portfolio of active WB projects in Egypt . This long-term interest in Egypt puts the World Bank in a position to shoulder some of the responsibility for the state of the built environment in Egypt.


Why has the large amount of foreign and national funding not succeeded in solving or substantially addressing the many built environment challenges faced by Egypt's citizens? Have the Bank’s efforts played a positive role in promoting pro-citizen built environment policies and projects? This study explores answers to these questions through an overview of the World Bank’s strategy toward Egypt, the Egypt 2006-2009 Country Assistance Strategy (CAS), which was extended until May 2012. The strategy's main objectives were; facilitating private sector development, enhancing the provision of selected public goods, and promoting equity. The CAS is also analysed in light of the Bank's investments in policy programs and development projects during the same period.


Selected Findings

While the state seems to be the sole owner and regulator of most of the elements that shape the built environment, in reality ownership is divided between the state, the informal private sector and the formal private sector.  Besides the infrastructure services, such as energy, water and waste-water, the other three components of the built environment: housing, transport and solid waste collection, are already for the most part liberalized, though this has not meant that they have performed any better than the public sector services.


On developing the private sector and in using the PPP model

While the 2006-2009 CAS finds that the “GoE is conscious of the need to ensure resulting [privatisation] arrangements do not create private monopolies and that they are embedded within a regulatory and supervisory framework that protects the public interest, ”it is clear from the way the solid waste management sector has performed since it has been formalised that there is a need for greater focus on regulation.


On regional disparities

Only a comprehensive built environment policy, along with representative local government, will balance regional disparities and promote the equitable distribution of services and investments, something that the 2006-2009 CAS largely failed to achieve and where investment remained highly centralized in the Greater Cairo region.


On stakeholder consultation

The lack of true representation and consultation of stakeholders was another area in which the 2006-2009 CAS was weak. “Stakeholder participation” in the CAS was largely limited to central government and private sector affiliates, rather than including a broader range of affected stakeholders.  In order for a comprehensive built environment policy to be formulated, local community participation must be mainstreamed into both the policy development and project development frameworks.


On promoting equity and the poor

Just less than a quarter of the WB portfolio of investments was themed as "urban services for the poor", and even then the "poor" were not well defined. For example the Affordable Housing Mortgage programme's target was middle and lower middle income groups – between the 75th to 45th percentiles - and not the low income groups.


On involuntary resettlement

Half of the 14 built environment-related projects, totalling 63 per cent of the built environment portfolio by investment value, triggered the Bank’s involuntary resettlement safeguard policy, indicating that there was a risk of people being displaced from their lands, homes, or livelihoods as a direct or indirect result of the project. Because involuntary resettlement has enormous impacts on families and communities, it is especially important that the Bank and the government weigh the costs with the stated public benefit of the project, and give serious consideration to alternatives, when resettlement or economic displacement is a possibility.


The home-grown systems that have kept the Egyptian built environment humming over the last half of a century have gradually been replaced by supposedly more “efficient,” “economic,” or “cost effective” ones. However, the newly-introduced systems, most of them part of privatization programs, are suffering, along with the citizens they are meant to be serving.


Taking an in-depth look at the 2006-2009 CAS has demonstrated several areas in which the World Bank in coordination with the GoE failed to address the true needs of Egypt’s citizens in the built environment. In the coming 18 months of the Bank’s new interim strategy, there is a great opportunity for the World Bank and the Government to work with citizens and all stakeholders to develop a comprehensive plan for the built environment. This will in turn help to guide the Bank, GoE, and stakeholders in the development of a new, post-revolution CAS that will reflect the needs of the built environment and the Egyptian citizens who have kept it running for the past several decades.


A draft version of the study can be found here.